It is an absolute reality that Hong Kong has continued to operate effectively and efficiently as a separate customs territory after the handover of sovereignty on 1 July 1997.

This was said today (September 29, Washington time) by the Commissioner of Customs and Excise, Mr John Tsang Chun-wah, when delivering a speech on "Hong Kong - A Separate Customs Territory : A Myth or Reality?" at a luncheon organised by the New American Foundation in Washington, DC.

Mr Tsang is currently in the United States for a 10-day official visit.

He said that under the Basic Law of Hong Kong and the concept of the "one country, two systems", the people of Hong Kong enjoy a high degree of autonomy and independent executive, legislative and judicial powers, including that of final adjudication.

"In fact, we are able to manage everything for ourselves except for matter concerning foreign affairs and national defence which are the responsibilities of the Central People's Government," he added.

He went on to say that under Article 116 of the Basic Law, it is prescribed that "The Hong Kong Special Administration shall be a separate customs territory.".

"There have still been wild stories flying around in the international media that Hong Kong's economic autonomy has been greatly eroded, that the Beijing Government is interfering in Hong Kong's administration, that Hong Kong is the base of diversion for the PLA to smuggle controlled items into China and that Chinese owned firms in Hong Kong escape prosecution for gross criminal acts. These are myths, absolutely ridiculous fabrications, created out of ignorance of the reality and misconception of the actual situation in Hong Kong," he said.

Mr Tsang explained that the Customs had played the role in maintaining Hong Kong's status as a separate customs territory in three areas, namely boundary enforcement, control of strategic commodities and participation in international organisations.

"On boundary enforcement, we have a renowned import and export regulatory regime with good control over passengers and cargoes entering and leaving Hong Kong."

"We are doing a great deal of work now to facilitate the movement of people and goods, but we will not be doing that at the expense of enforcement," he said.

The Hong Kong Customs is employing a risk management approach to make it easy for the flow of all the legitimate trade, and focus instead the resources on the very small proportion of illicit business.

"All cargoes, mail and parcels, passengers and carriers entering or leaving Hong Kong by air, sea or land routes are subject to Customs inspection and clearance," he stressed.

He added that the Customs had been maintaining close cooperation with its overseas counterparts and other law enforcement agencies, especially its counterparts on the Mainland, to enhance the effectiveness of the control system.

Turning to the control of strategic commodities, Mr Tsang said that Hong Kong continued to operate a world class system of control which had been commended by all the key players of strategic export control regimes, including the United States administration.

"The totality of our control system on strategic commodities focuses not just on the entry and exit points, but in fact also on the monitoring of sensitive goods in transit, the disposal of strategic commodities after importation and re-export of goods which are required to be supported by authorisation from source countries," he explained.

The Central People's Government of China was totally supportive of Hong Kong's special status and had stated clearly that all state organs in Hong Kong had to abide by the Basic Law and all Hong Kong laws, Mr Tsang elaborated.

On the participation in international organisations, Mr Tsang said, "Hong Kong is a founding member of the World Trade Organisation serving under the name of "Hong Kong, China", having been a member of the GATT for some years. This position will not change even with the entry of China into the world body."

"We will continue to operate as we have always done so, autonomously and in a way that would protect our interest," he said.

"We are also a member of the World Customs Organisation for many years, and this year we have been elected to be the Vice-Chairman responsible for the coordination of activities in our region which includes China. This is another good example that we are operating as a separate customs entity," he said.

Mr Tsang reiterated that the principles of the "one country, two systems" concept has successfully provided Hong Kong with the high degree of autonomy that has enabled the continuation of our status as an independent customs territory.

"As the Commissioner of the Hong Kong Customs, I can assure you that we are continuing to operate as an independent customs territory. We will continue to strive to uphold Hong Kong's trading integrity and safeguard the faithful implementation of the "one country, two systems" concept," he stressed.